20/09/2018
What is an Emergency Fund?
Everybody should do their best to build up an emergency fund. The idea is to have at least three months’ worth of your salary saved up in a savings vehicle that allows you quick and easy access to the funds. This is to help pay for your monthly expenses such as rent, food, school fees and any other essential requirements if you were to find yourself in a situation where you may need financial assistance. Thus your emergency fund means you have some financial security if something goes wrong.
A good option for an emergency fund would be a Tax Free Savings as it is liquid and all returns are tax free. With a maximum annual contribution limit of R33 000, and a lifetime limit of R500 000 this serves as a great way to invest your money.